TMI Blog1993 (3) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had filed a return showing loss of Rs. 4,43,750 which was revised on 15-3-1982 to a figure of Rs. 7,08,546. The ITO completed the assessment on 30-8-1983 on a total income of Rs. 3,02,077. In the end he wrote-- " Charge due interest " However, since the assessee had paid tax by way of TDS at Rs. 2,67,518 and the assessed tax was Rs. 1,74,564, the interest was not charged under section 215. Thereafter, the matter became a subject matter of appeal and the CIT (Appeals) set aside the assessment on certain points. Meanwhile the assessee along with Lohia Machines Ltd. had approached the Supreme Court against the amendment of section 80J with retrospective effect. By the time the ITO gave effect to the appellate orders, the decision of the Hon'ble Supreme Court in the case of Lohia Machines Ltd v. Union of India [1985] 152 ITR 308 had been reported and hence while computing the total income of the assessee the ITO mentioned that the deductions under section 80J admissible to the assessee as per Supreme Court decision worked out to Rs. 10,96,508 against Rs. 29,12,378 originally allowed. This is resulted in the increase of the total assessed income which now worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be increased or could not be charged if it was not charged originally. The learned counsel referred to the decision of the Hon'ble Rajasthan High Court in the case of CIT v. Multimetals Ltd. [1991] 187 IIR 98 so also to a decision of the Ahmedabad Bench of the Tribunal in ITO v. Coronation Flour Mills [1990] 32 ITD 550. He submitted that as per the decision of the Hon'ble Rajasthan High Court it had been held that the interest under section 215 could be charged only on the basis of regular assessment and that the amendments to sections 215(3) and 139(8)-- Explanation 2(b) were prospective and not retrospective. The same view was taken by the Ahmedabad Bench of the Tribunal in the case mentioned above. 4. Shri C. L. Jhanwar submitted that an alternative argument to the effect that in the order under dispute, the Assessing Officer has not mentioned " Charge interest " and since there was no authorisation to charge interest, the interest under section 215 could not be charged. 5. The learned Departmental Representative on the other hand drew our attention to the decision of the Hon'ble Rajasthan High Court in the case of Golecha Properties (P.) Ltd. v. CIT [1988] 171 ITR 47 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st instance it is not correct, as was argued before the learned CIT (Appeals) so also before us on behalf of the assessee, that the deductions under section 80J had been reduced on account of retrospective amendment to section 80J introduced by Finance Act, 1980, the validity of which was upheld by the Hon'ble Supreme Court in the case of Lohia Machins Ltd. A perusal of the order of the Hon'ble Supreme Court in the case of Lohia Machines Ltd. would show that their Lordships have not only upheld the validity of the retrospective amendment to section 80J by virtue of section 80J(1A) but they had discussed in detail the historical background of those provisions starting from section 15C of IT Act, 1922. section 84 of IT Act, 1961 (before its amendment and substitution by section 80J) and rule 19A of the IT Rules. Their Lordships have also specifically held that the provisions of rule 19A (as it stood in the assessment year under consideration before us, namely, assessment year 1979-80) which provide for exclusion of borrowed capital for the purpose of computation of capital for giving relief under section 80J were always valid. Since the law interpreted by the Hon'ble Supreme Court is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lordships have observed to the effect that there are provisions in the IT Rules to the effect that if the assessee can show sufficient cause for reduction or waiver of interest, the assessee can approach the ITO or the Deputy Commissioner of Income-tax, as the case may be. This would mean that if in the instant case the assessee had some reasons on the basis of which it claimed that the interest charged should have been reduced or waived, it could have approached the appropriate authorities, but it could not be said that no interest was chargeable at all particularly when the assessee had withheld payment of correct advance tax for which it had to compensate the Government by way of payment of interest under section 215. In this context we may also refer to the decision of Hon'ble Rajasthan High Court in the case of Golecha Properties (P.) Ltd. cited by the learned Departmental Representative where on page 56 of the report their Lordships have observed as under : " The material provisions are section 139(8)(a) and the proviso thereunder read with rule 117A of the Income-tax Rules. 1962. and section 215(4) read with rule 40 of the Income-tax Rules. 1962. A plain reading of these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be no dispute but it has to be kept in mind that the provisions of section 215(3) as they stood prior to the amendment did not include section 147 and section 263, which sections have got the provision of enhancing the income of an assessee and hence what was contemplated before amendment was only that situation where the income could not be assessed at a higher figure than the figure at which it was originally assessed by the Assessing Officer, although it could have reduced as a result of giving effect to the sections which were mentioned in section 215(3), namely, sections 154, 155, 250, 254, 260 and 262. But the decision in the case of Lohia Machines Ltd. has not come under any of the sections which were mentioned in section 215(3) before its amendment, that decision has been given in a writ petition which had been filed by Lohia Machines Ltd. and in which the assessee itself was also a petitioner and hence it cannot be said that the income of the assessee has increased as a result of an order under section 154 or 155 or 250 or 254 or section 260 or section 262 or section 264 which only provided for reduction of interest but not its increase. Hence on the basis of these ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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